Roofless community solar power developer Clean Energy Collective, launched a shared solar program to provide investor-owned utilities with the ability to rate base a community solar program while offering solar power customers an immediate economic benefit, without non-participant subsidization.
CEC’s new IOU-owned solar model bucks conventional wisdom that utilities cannot justify ratepayer solar participation without creating a subsidy.
The current intersection of low solar installation costs, high customer demand for community solar options, rising energy rates, and the availability of the solar investment tax credit drive the inflection point. The opportunity for the best returns, however, has a limited lifespan as the ITC is set to expire at the end of 2016.
To address the distinct needs of IOUs, CEC’s new community solar program provides the utility the ability to own the solar system so that the asset can be included in their rate base.
Meanwhile, the federal ITC is monetized and cash proceeds are returned to the utility on a schedule that tracks the associated revenue requirement. CEC continues to provide the expertise and services necessary to make the community solar program a success. The result is a program that offers utilities a competitive return and positive net present value from their solar investment without requiring a cost-shift to non-participants, thus creating no upward pressure on rates.
Not only does the utility benefit from this structure, it also translates to a better customer experience in the form of lower participation costs, favorable program-term lengths, and a faster payback period. As a result, utilities are able to meet market demands for renewables, regulatory requirements and achieve respectable margins.
Programs under regulatory consideration and solar projects already within development are also strong candidates for CEC’s IOU rate-based community solar offering.